These 2 Medical Stocks Could Beat Earnings: Why They Should Be on Your Radar

Zacks Investment Research promotes its Earnings ESP tool, which identifies potential earnings surprises by comparing the most accurate analyst estimate to the consensus. This methodology, when combined with a Zacks Rank #3 (Hold) or better, has historically predicted positive earnings surprises 70% of the time, leading to an average annual return of 28.3% over a 10-year backtest. The article highlights medical stocks GSK (+4.74% ESP) and Gilead Sciences (+0.77% ESP), both with a Zacks Rank #3, as current examples poised to beat upcoming earnings estimates in July and August 2025, respectively. This systematic approach offers investors a data-driven method for identifying short-term trading opportunities around quarterly reports.

Analysis

The analysis centers on a quantitative signal, the Zacks Earnings Expected Surprise Prediction (ESP), which indicates a heightened probability of upcoming earnings beats for two medical sector stocks, GSK (GSK) and Gilead Sciences (GILD). According to the methodology, a combination of a positive ESP and a Zacks Rank of #3 (Hold) or better has historically preceded a positive earnings surprise 70% of the time. GSK exhibits a particularly strong signal with a +4.74% ESP, derived from a Most Accurate Estimate of $1.15 per share versus a consensus of $1.10 ahead of its July 30, 2025 report. Gilead Sciences shows a more modest, yet still positive, signal with a +0.77% ESP, based on a Most Accurate Estimate of $1.98 versus a $1.97 consensus for its August 14, 2025 earnings. While both stocks carry a neutral #3 (Hold) rating, suggesting they are expected to perform in-line with the broader market, the positive ESPs from recent analyst revisions present a potential short-term, event-driven catalyst.

Key Decisions for Investors

• Investors employing event-driven strategies may consider establishing tactical long positions in GSK and GILD ahead of their respective earnings reports to capitalize on the potential for a positive earnings surprise.
• Given GSK's significantly higher ESP of +4.74% compared to GILD's +0.77%, a trade in GSK could be viewed as having a stronger quantitative signal for an earnings beat and subsequent price movement.
• It is important to recognize that both stocks have a #3 (Hold) rating, implying this is a short-term catalyst trade rather than a long-term fundamental buy; positions should be monitored closely around the late July and mid-August earnings dates.